JOHANNESBURG (miningweekly.com) – LSE-listed Avocet Mining has reached a temporary agreement with former employees of Société des Mines de Bélahouro (SMB) regarding a recent gold seizure at the group’s Inata gold mine, in Burkina Faso.
A gold shipment containing about 1 400 oz from the mine, seized in October, was released on Monday following a judge’s ruling that the seizure be lifted.
Bailiffs acting on behalf of the former SMB employees, who had been laid off following an illegal strike in December 2014, had seized the shipment.
At the time, Avocet, which owns 90% of SMB, which, in turn, owns the Inata mine, said the legal basis for the seizure was, according to representatives of the former employees, a number of unpaid benefits that remain outstanding.
Meanwhile, workers have returned to site and gold sales and production will restart over the coming days.
Under the terms of this agreement, SMB will work with the ex-workers to agree on a final settlement over the next 30 days.
If a settlement is not reached, there remains a risk that production and gold sales will need to be suspended again if there is any risk of further gold seizures.
With the resumption of gold sales, payment of management fees by SMB to the company will also restart, without which Avocet will need to obtain third-party funding to meet its head office and corporate costs, due in December.
If no funding is obtained either from Inata or a third party, it is likely that the company will enter an insolvency process, in which case it is highly unlikely that any value will remain for shareholders.